Running costs double JSF price tag to $24b

The cost of running the 58 Joint Strike Fighters announced by the Abbott government will double the price tag for the cutting-edge planes to a towering $24 billion, it was revealed on Wednesday.

While announcing the blockbuster purchase in Canberra, Prime Minister Tony Abbott said that the cost would be “$12 billion for the aircraft and equipment … and a further $12 billion to keep them operational” – doubling the total hit to taxpayers.

While the government won broad support for its planned purchase of 58 additional Joint Strike Fighters – on top of the 14 already ordered – some experts questioned Mr Abbott's claim that the planes are already paid for in the budget.

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Mr Abbott revealed that the three squadrons of Lockheed Martin F-35 planes would be delivered by 2023, transforming the nation’s air combat capability within less than a decade.

That is a faster schedule than some experts expected and means Australia will need to buy up to 12 each year from 2018, with each expected to cost about $100 million for the plane alone. The cost increases to $200 million with weapons and systems.

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During the announcement, Mr Abbott and Defence Minister David Johnston repeatedly sought to deflect perceptions the government was spending big on defence while planning tough cuts to pensions and other social spending in next month’s budget.

“This is money that has been put aside by government over the past decade or so to ensure that this purchase can be responsibly made,” Mr Abbott said.

Senator Johnston said: “We have been putting money away . . . and it’s been there, it’s been building up and it’s in the budget.”

But Stephen Bartos, a former deputy head of the Finance Department and now executive director of Acil Allen Consulting, said that while money was included in recent budgets’ forward estimates – the coming four years – it had not in any sense been put aside in past years.

“The JSF is going to be an acquisition over many more years . . . What this will do is, essentially in the years beyond the forward estimates [the next four years], put pressure on the budget because these will have to be paid for.”

The Australian Strategic Policy Institute’s Andrew Davies, regarded as one of the nation’s leading experts on military hardware, agreed the fighter would be a hit to the budget that had not already been put aside.

But Dr Davies broadly backed the purchase, saying the F-35 was the best plane available.

"It remains a work in progress so this is a decision that still carries some risk, but we're in a much better position than we were two or three years ago because the management of the program has really been tightened up."

Other experts agreed the fighter would be the best and most advanced stealth fighter for the coming years.

“It’s the best option available for the technology,” said James Brown, military fellow at the Lowy Institute.

And Labor, which had also planned to buy the F-35, welcomed the announcement.

"We fully support these purchases. The JSF is a defence capability which will serve Australia well for decades to come," defence spokesman Stephen Conroy said.